Facebook identities on bitcoin wallets could get bitcoin to the mass market: Chamath Palihapitiya

Chamath Palihapitiya, a venture capitalist and former executive at Facebook Inc.
/quotes/zigman/9962609/delayed/quotes/nls/fbFB, has a lofty vision for bitcoin that doesn’t leave any room for the political ideals or anonymity that characterized its early stages.

“Bitcoin, if it works, is a disruptive tool to empower the masses,” he said in an interview in San Francisco. There’s a lot of work to be done — the much-hyped promise of bitcoin’s use in remittances hasn’t yet been realized — and that leaves no time to get caught up in political ideals, he said.

“I don’t care what the political agenda is of the people who started it,” said Palihapitiya. “They started something magnificent, they deserve credit for that, but it’s bigger than them now.”

The promise of bitcoin lies in the blockchain, or decentralized ledger that keeps track of all transactions, he said. That view was one shared by several venture capitalists and entrepreneurs speaking at a conference in San Francisco this week.

One idea he tossed out was connecting people’s identities to bitcoin wallets, which he said could add legitimacy to the blockchain. Introducing identity would add “tremendous value” and is something that Facebook would be able to do, he said.

“I think the only company that could legitimately do it is Facebook,” said Palihapitiya. At a CoinSummit panel on Wednesday, he also said he thinks Facebook Chief Executive Mark Zuckerberg thinks bitcoin is cool. Facebook declined to comment.

“Today, if you have a wallet, it doesn’t say your name,” said Palihapitiya. A development that could bind a Facebook identity to a particular wallet could make sending money much simpler, he added. ”That’s the type of simplification that allows bitcoin to get to the mass market,” he said. At the same time, that would chip away at the anonymity of bitcoin users, one of the attractions for some early adopters.

Two applications of the blockchain, or the decentralized ledger, that are of particular interest are smart contracts and triple-entry accounting, said Palihapitiya.

“The idea is that you’re replacing paper with computer code,” he said. “The reason why that’s related to bitcoin is that the bitcoin protocol enables seamless digital payments, low costs, and it has this concept of this blockchain.”

Palihapitiya hasn’t just been thinking about bitcoin abstractly. He currently holds more than $5 million worth of bitcoins, though he wouldn’t be more specific on the actual amount, and plans to continue buying.

“All revolutions are actually incremental revolutions,” he said. “It’s first going to take enough people who are crazy enough to buy and hold it so that it doesn’t go to zero. And then something else incremental has to happen.”

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